Bankruptcy Options: Including Closed Accounts in Bankruptcy
There are many benefits of filing for bankruptcy. It’s a serious remedy to a serious problem. Some consider filing for seemingly nominal reasons. Luckily, most of these will reconsider due to the fact that bankruptcy is not an easy process without repercussions. It is an effective process that should be used only when it is completely unavoidable. It is a last ditch resort for impossible financial problems.
What’s the most important aspect of bankruptcy? That’s easy…getting it right. You don’t want to go through the entire process and not obtain the maximum protection that bankruptcy can provide. One issue that can cause hiccups for petitioners is “the closed account.”
- Maybe you called in years ago, and closed the account out and you forgot about it.
- Maybe you didn’t close the account voluntarily, but it got closed years ago and you never addressed it again.
- Maybe you closed an account with a balance voluntarily, but kept making payments.
Bankruptcy petitioners find these situations confusing. They feel that they have somehow changed the nature of the debt by closing the account or by having an account that was closed without their request. This particular dilemma is easy to address because no matter why the account was closed or what your intentions were regarding your account in the past – it doesn’t matter. There’s only one thing to remember when you’re trying to decipher whether or not the status of your account affects your bankruptcy or what is listed in the bankruptcy. And it’s the simplest answer you will ever see in response to any frequently asked question about bankruptcy. Here it is:
You cannot pick and choose creditors to list in a bankruptcy.
Anyone and everyone that you owe money to or potentially owe money to should be listed in your bankruptcy: student loans, delinquent income taxes, open credit cards, closed credit cards, secured loans, credit cards with balances, credit cards with no balances, delinquent alimony or child support, personal loans, that emergency $100 you borrowed from your brother to add power (but that you actually used to buy a few rounds at your buddy’s bachelor party)… It doesn’t matter if you are trying to eliminate the debt or not. It doesn’t matter if bankruptcy can wipe them out or not. You always list ALL creditors in your bankruptcy schedule.
If you are still unsure of how bankruptcy will handle your creditors, get in touch. An experienced southern California bankruptcy attorney at Westgate Law can explain to you which debts can be wiped out and how to go about it, but regardless…the first step is to include every creditor in the schedule.